Microsoft is building a cloud-based gaming service, and used Halo 4 to demonstrate how the service can be utilized on Windows and Windows Phone.

Microsoft’s cloud gaming service is still in its infancy, and Microsoft has not yet decided on a name for it. Sources familiar to the matter revealed to The Verge that Microsoft was able to achieve a latency of just 45ms on low-end devices like the Lumia 520. Microsoft also showed off an Xbox controller attached to the Lumia through an accessory.

The cloud-based service will likely utilize Microsoft’s Azure platform, and will try to emulate Sony’s Gaikai streaming service. Sony bought Gaikai last year for $380 million, and has announced last week that it will offer a library of digital games for PlayStation 3 through the service in 2014. Sony mentioned that users will be able to stream these games onto the PlayStation 4.

Microsoft might be looking for a similar service to offer backwards compatibility to older games in its catalogue. Senior director of Xbox, Albert Penello, said in an interview last week that cloud streaming using Azure can be used for “more complicated things like rendering full games like a Gaikai and delivering it to the box.” He also said that the idea is yet to take off.

“We just have to figure out how, over time, how much does that cost to deliver, how good is the experience.”